Mobile-Game Maker Jam City to List In $1.2 Billion SPAC Deal

(Bloomberg) -- Jam City Inc., the developer behind mobile games including “Cookie Jam” and “Disney Pop Town,” has agreed to go public in a deal with a blank-check company.

As part of the transaction, Jam City is acquiring Montreal-based game publisher Ludia Inc., according to a statement Thursday, which confirmed an earlier Bloomberg News report. The two companies will combine with DPCM Capital Inc., the special purpose acquisition company set up by a former Uber Technologies Inc. executive, Jam City said in the statement.

The combined company will have a valuation of $1.2 billion including debt, the statement shows.

Nearly all gaming companies benefited from the home-entertainment surge during the coronavirus pandemic. With more people stuck indoors, the companies’ user bases exploded, and are expected to stay high even as life returns to normal. Attracted by the companies’ explosive growth, investor interest in gaming stocks has also been high. Earlier this year, game-maker Roblox Corp. went public via a direct listing, another alternative to an initial public offering.

“We’ve proven our ability to acquire new companies and we’ve proven our ability to build great mobile entertainment experiences in-house,” Jam City Chief Executive Officer Chris DeWolfe said in an interview. “We want to fuel that growth -- we need more capital to do that, and we need a public currency to do that.”

Jam City projects that by 2023 it will produce $1 billion in booking revenue after the combination with Ludia and the SPAC, up from $471 million in 2019, an investor presentation showed.

Upon going public, Jam City plans to remain acquisitive, DeWolfe said. It is in constant dialogue with 30 to 40 companies and plans to make another acquisition within a year after the SPAC transaction closes, he added.

Netmarble Led Placement

Korean gamemaking giant Netmarble Corp., an existing investor of Jam City, and a group of other investors have committed $100 million to a private private placement to support the deal, according to the statement. While new shares issued in the placement have a value of $10, placement investors paid $8.42 per share, according to an investor presentation.

Investors usually pay $10 a share in the placement with few exceptions. Lucid Motors Inc. raised $2.5 billion in a PIPE at $15 per share when it announced a combination with Michael Klein’s Churchill Capital Corp IV after the SPAC’s shares ran up to as high as $58 before the deal was announced.

Ludia, which makes games based on the “Jurassic World” movies, was valued at $175 million in the takeover, the statement shows.

Jam City was founded in 2010 by DeWolfe, a MySpace co-founder as well as its former CEO. Culver City, California-based Jam City has a multiyear game development agreement with Walt Disney Co., along with its in-house offerings.

DPCM, the blank-check firm, is led by Chairman and CEO Emil Michael, a former senior vice president of business for Uber. The company raised $300 million in its October IPO. The stock fell 0.1% to $9.85 at 11:29 a.m. in New York trading.

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